In the World Energy Outlook 2012 report the IEA presents its view of future crude oil production (see the figure). With decreases of over 2 million barrels per day (Mb/d) by 2035 both Russia and China have passed Peak Oil. In other nations where crude oil production has previously reached Peak Oil, the decline in their production continues. The savior in this time of need is Iraq with a projected increase in production of 5.5 Mb/d. We have previously heard that ExxonMobil wants to leave projects in southern Iraq and now Statoil is leaving West Qurna at the same time as other intended operators are writing down their production volumes by 600,000 barrels per day. Thus it is now doubtful that an increase in crude oil production of 5.5 Mb/d can be reached. The IEA states that world crude oil production - that was 70 Mb/d in 2008 - will decline to 65 Mb/d by 2035. However, now we are hearing several indications that it will be lower. Here is a quote from the Oil & Gas Journal:

“Lukoil and two state oil companies have lowered the contractual target for crude oil output from West Qurna-2 oil field in Iraq by one-third. Under a supplement agreement to the production service contract accounting for Lukoil’s acquisition of the interest formerly held by Statoil, the production target falls to 1.2 million b/d from 1.8 million b/d. …

“Lukoil signed a supplemental agreement with North Oil Co., which holds a 25% interest in the contract, and South Oil Co. The acquisition of Statoil’s 18.75% stake increases Lukoil’s interest to 75%.”

As a comparison, the total production of shale oil from the Bakken Field in the USA is 600,000 barrels per day. The production comes from around 5,000 wells and to maintain this level of production around 1,500 new wells must be drilled every year. In Iraq, we are seeing the “west” drawing back and the “east” – Russia and China – are taking a greater slice of the cake.